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Caffe Nero profits perk up

14 September 2004
Caffe Nero profits perk up

Profits shot up at coffee bar chain Caffe Nero during the year to 31 May as increased sales from new openings fed straight through to its bottom line.

Turnover was up by 28% to £50.5m as the firm opened 43 new outlets, taking its total to 162 stores in 66 UK towns and cities.

Profits from its stores, before head office overheads, increased by 46% to £10.6m.

Pre-tax profits (before amortisation and exceptionals) were up by 127% to £2.4m.

Chairman Gerry Ford said the leap in profits reflected the fact that "having readed a threshold size of stores and infrastructure, a large portion of each new store's profit now flows down to the group's profit line."

He added that the company was now self-financing: it could fund its new openings from the cash being generated by its stores.

Since the year-end, Caffe Nero has opened 21 new outlets, taking its total to 183.

It expects openings to continue at the same rate for the rest of the year - at about one new store every 10 days.

Caffe Nero added that it had made a strong start to the current financial year, with sales up by 40% and like-for-like sales up by 6.5% in the first three months.

It said the coffee-bar market was thriving and that suitable new premises were now available at "reasonable" prices.

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